Shailesh Dashhttps://shaileshdashdotcom.wordpress.com
Founder And CEO- Al Masah Capital LimitedTue, 10 Apr 2018 09:05:42 +0000enhourly1http://wordpress.com/https://s0.wp.com/i/buttonw-com.pngShailesh Dashhttps://shaileshdashdotcom.wordpress.com
The Impact of Cyber Threats on the Way Businesses Operatehttps://shaileshdashdotcom.wordpress.com/2018/04/10/the-impact-of-cyber-threats-on-the-way-businesses-operate/
https://shaileshdashdotcom.wordpress.com/2018/04/10/the-impact-of-cyber-threats-on-the-way-businesses-operate/#respondTue, 10 Apr 2018 09:00:18 +0000http://shaileshdashdotcom.wordpress.com/?p=323Cyber security is no longer just a buzz word; it is a serious threat to modern business.

Rapid technological growth over the last decade has brought with it an explosive proliferation of data and as technology evolves, so do security issues. The connectedness of today’s world requires a new outlook on dealing with cybercrime.

An internet penetration of almost 46% of the global population has resulted in an exponential growth in cybercrime opportunities, with attacks costing around $400 Billion per year. Currently, 15 to 20 percent of value created by the internet is lost to cyber-attacks, and cyber threats are the new entry in the top ten global business risks over the next decade. Violations of privacy, losses of corporate data, and the interruption or shutdown of business operations are becoming more common in today’s connected environments, and the important question is how quickly and efficiently you can respond if you are compromised.

Businesses face increasing scrutiny for their choices in minimising global risk, and cyber risk that has been previously underestimated will attract increasing focus in the coming years. Shareholders and customers are aware of these threats and their potential impact on service continuity and supply chains, so business leaders need to develop greater resilience in these areas to protect profitability. Customers are keen to know how the businesses they deal with are handling security issues, and are more likely to patronize businesses that are transparent and upfront about the protections they are using.

Investing in Resilience

Resilience is the ability to recover from and adjust to change. For companies, this requires preparation and planning for cyber-attacks, and enterprises must focus on boosting resilience as high as possible or reducing risk by reevaluating their highest-risk activities. Risk can no longer be viewed as being binary or perfect; it is a continuum that must be continuously improved and reevaluated. Key to this is being a fast learning organization.

Taking a Top-Down Approach

Cybersecurity can no longer be treated as a mere add-on to the IT budget, and must be treated as a core boardroom issue, encompassing cyber security as a business risk, not simply a technology risk. Taking more of a holistic approach to business security allows companies to integrate cyber protection into all aspects of the business, from the IT department, to security policies, to training. Risk management must become part of day-to-day operations.

Paramount to this is the creation of a top-down culture of security awareness, and management of cybersecurity on an organization-wide basis. It is an issue that cuts across finance, human resources, legal, compliance, technology and the business front end of a company.

Conclusion

Businesses moving towards a safer cyber environment must have input from all areas of the enterprise to strengthen their preventative strategies, and minimise major disruptions to business operations when the inevitable happens. Cyber security cannot be performed by one department alone, and is a team sport from within the business.

Now more than ever, professionals and IT experts can communicate more efficiently and disseminate information in a collaborative environment, with new concepts and ideas shared to address and improve security concerns. Businesses will be able to secure and share information, revolutionizing the way private enterprise, government, education systems and customers navigate our rapidly transforming digital world.

]]>https://shaileshdashdotcom.wordpress.com/2018/04/10/the-impact-of-cyber-threats-on-the-way-businesses-operate/feed/0shaileshalmasahThe Benefits of Digitization on Wealth Managementhttps://shaileshdashdotcom.wordpress.com/2018/04/05/the-benefits-of-digitization-on-wealth-management/
https://shaileshdashdotcom.wordpress.com/2018/04/05/the-benefits-of-digitization-on-wealth-management/#respondThu, 05 Apr 2018 08:24:56 +0000http://shaileshdashdotcom.wordpress.com/?p=321Digital transformation has transcended firms and has penetrated the entire supply chain. It has impacted and continues to transform businesses and financial ecosystems integrating customers, governments and even regulators. This transformation has meant that businesses’ relationship-driven business models needed to shift away from personal interaction towards a more digitized interaction with clients. As Strategyand puts it, ‘a high-touch, high-tech model’, is now more relevant.

Financial sector has been a front runner of this transformation with the wealth management industry as no exception. Within wealth management, digitization has given the benefit of stronger client relationships, reduced operating costs, and enhanced risk management and regulatory compliance capabilities.

In a post global financial crisis world with increased regulatory requirements, high net worth individuals’ (HNWIs) expectations have exceedingly become challenging for wealth managers. HNWIs, who are typically tech savvy, are now not just looking for returns but are also seeking service that offers diversity of investment sources, flexibility, transparency and regulatory compliance, all on a digital platform. Wealth management firms that have invested in digitization have been able to capitalize on its benefits first by strengthening investor relationships and responding to their evolving needs.

Additionally, increasing competition within the industry is putting pressure on margins. This is forcing wealth managers to find innovative solutions to investors’ investments needs at lower costs. Adoption of technology and use of digitization has been used to achieve the mix of lower costs and innovative services. Digitization can help standardise some aspects of its investor relationships. For instance, information on investments data can be accessed easily by investors, which are customer focused, incorporates various risk-return profiles and covers different what-if scenarios. Digitization of internal management systems can greatly reduce costs in terms of administrative time consumed to respond to investors’ requests.

Another element of cost reduction is the better use of relationship managers’ and specialists’ time. Investor interaction using videoconferences or online chats make contact quick and easy. Moreover, an automated client management interface can also track individual investments, highlight suitable trading situations or bring to attention any deviations of portfolio from pre-established risk profile. Such digitization can bring immense benefits to wealth managers by freeing up their time from manual work allowing them to cater to more investors and eventually bringing down some of the administrative costs.

Another important benefit of digital solutions has been the ability of wealth management firms to manage risk and compliance. By investing in systems with applications that incorporate risk and compliance checks, firms have been able to reduce compliance costs and minimize reputational risks.

]]>https://shaileshdashdotcom.wordpress.com/2018/04/05/the-benefits-of-digitization-on-wealth-management/feed/0shaileshalmasahContours of Investments in Green Energy – GCChttps://shaileshdashdotcom.wordpress.com/2018/04/01/contours-of-investments-in-green-energy-gcc/
https://shaileshdashdotcom.wordpress.com/2018/04/01/contours-of-investments-in-green-energy-gcc/#respondSun, 01 Apr 2018 08:13:40 +0000http://shaileshdashdotcom.wordpress.com/?p=319GCC as a region boasts to be rich in hydrocarbon reserves, enough to maintain its position as one of the most formidable suppliers of energy to the rest of the world. According to the BP Statistical Review of World Energy June 2016, GCC collectively holds 29 percent of the world’s oil reserves and 22 percent of the world’s gas reserves. The region also accounts for 23 percent of global crude production and 11 percent of natural gas.

Despite being self-reliant and rich in hydrocarbon reserves, the GCC’s consumption patterns and an insatiable demand by industries, is a harbinger of rising long run sustainability concerns; a matter that has rightly caught the attention of governments within GCC.

The World Economic Forum notes that energy consumption in the GCC countries has grown at an average of 6 percent per year since 2000, outpacing GDP growth (at 5 percent) and population growth (at 4 percent). In the case of Saudi Arabia, the 8th largest producer of gas in the world, the domestic demand for electricity and water desalination is already so high that it must cover half of it by burning crude. Similarly, rising demand for domestic electricity has made UAE a net importer of natural gas.

Although low energy prices due to abundant supply, has fuelled economic growth, it has provided little incentive for energy efficiency and conservation, making per capita energy consumption in the GCC amongst the highest in the world. Moreover, the value this is adding to the economy is significantly below developed countries, and is decreasing.

GCC governments realise that if they do not respond by either curbing demand or creating alternative energy sources, domestic consumption could absorb most of its hydrocarbon production within the next 10-20 years, severely limiting the region’s ability to export crude and eventually leading to negative consequences for the national economies.

Keeping this in view, the governments have embarked on a diversification strategy to meet growing energy demand by announcing plans and targets for conserving natural resources, improving energy efficiency, and deploying renewable technologies.

The abundance of solar resource potential and the falling cost of associated technologies, mainly photovoltaic (PV) modules are major factors influencing the attractiveness of solar energy in the region. The GCC countries lie in the so-called Global Sunbelt and boast some of the highest solar irradiances in the world. Close to 60% of the GCC’s surface area is found to have excellent suitability for solar PV deployment, and developing just 1% of this area could create almost 470 gigawatts (GW) of additional power-generation capacity (Renewable Energy Market Analysis: The GCC Region).

Coupled with resource abundance, falling technology costs are translating into record low generation costs. The recent auction for the Mohammed Bin Rashid Al Maktoum Solar Park 2 in Dubai yielded prices as low as 5.85 US cents per kilowatt-hour (kWh). This price is one of the lowest in the world and even competitive with oil and gas in the region.

Additionally, if the GCC countries’ renewables objectives are met by 2030, International Renewable Energy Agency (IRENA) estimates that the projected 80GW renewable energy capacity could create an average of 140,000 direct jobs every year, lead to USD 55 billion to USD 87 billion worth of savings in fuel consumption, reduce CO2 emissions and lead to an overall reduction of 16% in water withdrawal (in power sector).

The World Economic Forum highlights that benefits of green energy initiatives are critical to the following contributions by the GCC:

Establish bold but achievable energy efficiency and renewable development targets

Create or strengthen institutions that bring together key stakeholders in the energy value chain and help to achieve stated targets

Improve regulatory frameworks that help develop renewables and energy efficient technologies, including incentives for private power producers and project developers

Focus the education system on the skills needed by the renewable energy sector

]]>https://shaileshdashdotcom.wordpress.com/2018/04/01/contours-of-investments-in-green-energy-gcc/feed/0shaileshalmasahChallenges in the Education Sectorhttps://shaileshdashdotcom.wordpress.com/2018/03/26/challenges-in-the-education-sector/
https://shaileshdashdotcom.wordpress.com/2018/03/26/challenges-in-the-education-sector/#respondMon, 26 Mar 2018 14:51:21 +0000http://shaileshdashdotcom.wordpress.com/?p=218Within GCC, countries like KSA and UAE are heavily spending in the education sector with the aim of competing and being at par with the top 200 international universities and institutions around the world. KSA is expected to have spent SAR 228 billion (highest after military expenditure) in education sector in 2017. Although it continues on its agenda for education, the government has earmarked SAR 192 billion towards public and higher education and workforce training for the year 2018; a 15.8 percent fall in expenditure.

In the case of UAE, Dh10.4bn has been allocated for general education and higher education, totalling 17.1 per cent of ‎the overall budget for 2018.

Overall, GCC spends $150 billion every year on education but challenges persist. Some of these challenges include insufficient pool of qualified teachers, difficulty in attracting and hiring skilled teachers, an increase in school construction costs, introduction of VAT, lack of diversity in programmes leading to a skills gap in higher education and economic uncertainty putting financial security of some education institutions under intense pressure.

In the case of UAE there is a need to hire a minimum of 14,000 teachers over the next five years. Nationals prefer higher paying public sector jobs over teaching jobs. This leaves the schools ending up hiring foreign teachers at attractive salaries thus raising costs of schooling for parents.

Construction costs are also on the rise in the region making schools a highly capital intensive venture for the private sector. The cost of construction has increased in the region as a result of increase in wages of contractors and workers along with an increase in cost of building materials. The cost of construction in Qatar is the highest across the GCC. Both the quality of teachers and construction costs result in higher tuition fees. For instance, Dubai is seeing a need for more quality schools below AED 40,000.

According to PWC educational institutions are expected to see an increase in their costs as a result of VAT in the GCC. There will be issue as Deloitte points out. First, defining what is educational vs. what is not will be difficult in some countries and is often tied to local education law. Second, if exemption applies, then VAT will become a cost on expenditure and if zero-rating applies, then VAT refunds and cash-flow will be an issue. EY highlights that tuition fees, school fees and trainings provided by private institutions in KSA will be subject to VAT. In addition, VAT will impact on going procurement contracts, human resource cost for the institution (e.g accommodation, gifts) and timing of supplies.

The government in UAE is focused towards promoting STEM subjects to promote diversity in the kind of courses offered. However, the field Business and Economics remains popular for university graduates, thus posing a challenge for the government wishing to bring in diversity (PWC) and lead to a potential skills gap in the country.

By far, the regions’ education sector has come a long way as a result of its governments’ unfettered resolve to establish institutions that are comparable to those in developed countries. However, with continuous efforts, governments will hopefully overcome these bumps in the road to excellence.

]]>https://shaileshdashdotcom.wordpress.com/2018/03/26/challenges-in-the-education-sector/feed/0shaileshalmasahGrowth of Alternative Capital in the Middle Easthttps://shaileshdashdotcom.wordpress.com/2018/03/25/growth-of-alternative-capital-in-the-middle-east/
https://shaileshdashdotcom.wordpress.com/2018/03/25/growth-of-alternative-capital-in-the-middle-east/#respondSun, 25 Mar 2018 13:49:01 +0000http://shaileshdashdotcom.wordpress.com/?p=316For any company, there is usually a lag between initial investment and first profit. During this time, the company will incur many costs and require capital to sustain itself. Without this capital, it cannot survive or grow.

Unfortunately, it is often the case that companies with great potential cannot access the capital they need to reach their next growth milestone. This is particularly evident in the UAE where SMEs contribute 60% of the country’s GDP, yet loans to SMEs accounted for just 4% of outstanding loans. The reason for low availability of conventional bank credit to SMEs is that these start-up businesses lack cash flows and sufficient assets to put up as collateral.

A viable option for businesses in this category is to consider alternative sources of capital, such as venture capital and angel investing. While the West has traditionally been the leader in the field, the Middle East has made many strides to catch up.

Venture Capital

Venture Capital (VC) firms target start-ups and invest on behalf of institutional clients, looking for decent returns. Ensuring the protection of the investment, Venture Capitalists usually take a director position in the business until they exit.

VC is most suitable for early-stage start-ups with few earnings and high potentials. At the Sharjah Entrepreneurship Festival, Crescent Enterprises announced a new venture capital arm of the company. The new section plans to invest $150 million in three years, with half the funds to be allocated in the MENA region.

Angel Investing

Angel Investing works as private individuals or consortiums provide financing in exchange for an equity stake in promising businesses that are yet to take off. The benefits that come along with angel investors are industry contacts, experience, and new ideas.

Angel investors usually expect an exit in a minimum of three years. Angel investing is most likely attracted by ambitious entrepreneurs requiring investment in early stages of businesses.

While Careem, Souq and Zawya’s examples have been quoted to death, another notable mention is Glambox. This is a Dubai based E-Commerce start-up and has been acquired by a Saudi consortium of investors. Another example is $4.5 million seed funding achieved by a UAE-based agricultural technology firm Pure Harvest.

Crowdfunding

Due to the increasing need for SMEs to raise capital, the Dubai Financial Services Authority (DFSA) recently launched a Crowdfunding Regulatory Framework. The framework aims to support growth in the Financial Technology (FinTech) sector, ensuring clear governance for businesses and protection for their customers.

An example is Enerwhere, the world’s first solar utility company, which managed to raise $700,000 through Eureeca, a Dubai based crowdfunding platform. This is the largest crowdfunding round witnessed in the region to date. Beehive, UAE’s first online platform for peer to peer lending, has also managed to facilitate over 200 businesses, raising a cumulative $35 million in the past 4 years.

Private Equity

As the name suggests, Private Equity (PE) is capital not listed on an exchange. PE includes funds and investors aiming to invest directly in private companies or carrying out buyouts.

PE has been the most common form of alternative capital available in the UAE. For example, the Abu Dhabi government-owned company Mubadala Investment has now acquired Russian Verno Capital’s private equity advisory unit. Mubadala plans to strengthen Verno’s internal investment and asset management across Russia and the CIS region.

Another example is Al Masah Capital investing in Diamond Lifestyle Limited (DLL) which operates restaurants under the Johnny Rocket’s brand.

Opportunities

Alternative Capital is a growing sector. However, traditional sources of finance still retain the lion’s share. There is a need to introduce policies and create awareness to enable this promising sector to be fruitful.

]]>https://shaileshdashdotcom.wordpress.com/2018/03/25/growth-of-alternative-capital-in-the-middle-east/feed/0shaileshalmasahEgypt’s Broad Based Economic Growth Grabs Investor Attentionhttps://shaileshdashdotcom.wordpress.com/2018/03/13/egypts-broad-based-economic-growth-grabs-investor-attention/
https://shaileshdashdotcom.wordpress.com/2018/03/13/egypts-broad-based-economic-growth-grabs-investor-attention/#respondTue, 13 Mar 2018 12:24:41 +0000http://shaileshdashdotcom.wordpress.com/?p=314After suffering greatly in the aftermath of the Arab Spring 6 years ago, Egypt is finally getting back on track. Vital sources of foreign exchange such as tourists and investors are returning. Also helping are a macroeconomic reform plan recommended by the IMF as part of its USD 12 billion loan program, improved security situation, new gas field discoveries as well as newly promulgated investor friendly laws which are attracting investor interest.

The recently discovered Zohr gas field, the largest in the Mediterranean spins a new perspective on the Egyptian economy. A major problem faced by Egypt was significant gas imports since local production was declining. This was putting undue pressure on foreign exchange reserves, which were already dwindling. The newly discovered field has enabled the country to wean itself of gas supplies, catering to as much as 30% of domestic demand. It, in fact, aims to make Egypt an energy hub in the region with the country expected to export significant quantities in the short term.

The government’s decision to rapidly devalue the local currency, while creating some chaos initially, has started paying dividends, the most notable of which is increased FDI, clocking in at USD 7.9 billion last year. The declining currency made assets cheaper in foreign currency terms and stock market has also been a chief beneficiary, with the EGX30 gaining as much as 70% during the year, attracting as much as 7.5 billion pounds in 2017, the highest level since 2010.

Inflation, which saw households resorting to cheese instead of meat as a source of protein, while still in double digits, has been significantly brought under control.

Aiding in the improving sociological scenario is government handouts, which is expected to increase purchasing power among the masses. This becomes especially important given the gradual phase out of fuel and other subsidies which were putting undue fiscal pressure on the government.

Having a large demographic base that contains a comparably young population, as well as the third largest population in Africa after Nigeria and Ethiopia, Egypt holds great potential for companies looking to establish a long term presence.

Thanks to the improving energy landscape, and also a commitment towards renewables, investment firms are targeting the markets renewables energy sector.

Investment has not only been limited to the private sector. Foreign investors are snapping government issued T-bills and hold a cumulative 22% of all debt outstanding, investing mainly in shorter-term maturities.

From falling inflation, rising investment and an improved energy scenario, Egypt’s economy is finally beginning to show improvement. While already attracting a lot of investor interest, there is still a lot around for bargain hunters.

]]>https://shaileshdashdotcom.wordpress.com/2018/03/13/egypts-broad-based-economic-growth-grabs-investor-attention/feed/0shaileshalmasahWhat Have We Learnt in the Last 10 Years – Post 2007/2008 Financial Crisis?https://shaileshdashdotcom.wordpress.com/2018/03/04/what-have-we-learnt-in-the-last-10-years-post-2007-2008-financial-crisis/
https://shaileshdashdotcom.wordpress.com/2018/03/04/what-have-we-learnt-in-the-last-10-years-post-2007-2008-financial-crisis/#respondSun, 04 Mar 2018 20:29:02 +0000http://shaileshdashdotcom.wordpress.com/?p=311Ten years on and the financial world continues to grapple with a series of challenges triggered by the global financial crisis (GFC) of 2007/2008. Although financial systems and economies are on the rebound, the trauma from the crisis still lurks in the dark and in the minds of central bankers, policy makers, households, managers, investors, borrowers and companies, alike. Many lessons have been learnt and alternative strategies are constantly evolving, changing the landscape of the financial world, both in theory and practice.

Harvard Business Review discusses how popular economic notions and theories on how we thought our markets functioned and behaved, imploded with the GFC. The old macroeconomic theories came under heavy criticism and central banks, particularly the Bank of England, ushered in newer ideas on market behaviour. George Soros launched The Institute for New Economic Thinking in 2009 with the aim of funding and disseminating unorthodox research into financial market behaviour, the macroeconomic impact of inequality and others.

In practice, industry leaders and regulators believe that while it may be difficult to predict the next crisis, there are clear measures that need to be taken in order to ensure that the obliterating impact of such crisis are limited.

Building a Diversified Portfolio

According to Franklin Templeton Investments, fund managers need to build a diversified portfolio with a mix of global stocks and bonds that are uncorrelated and are based on investors’ individual goals, risk tolerance and investments timelines. It also suggests that diversified portfolios should be subject to a periodic rebalancing, say quarterly. On the equity side, investments need to be diversified across market capitalization spectrum, industries and geographic regions.

Staying the Course

In addition to consensus among industry leaders that diversified long-term investments will preserve (Financial Times), some suggest others to have the fortitude to stay the course, be prudent with leverage and have a lending partner, and not just a lending facility. Early and often thoughtful asset allocation analysis is the only tried and true remedy. Don’t let the winds of the markets take you off course.

Communicate Clearly and Consistently with Investors

One of the best ways to stay the course is to maintain a clear and consistent line of communication with investors. The global financial crisis underscored the importance of this as the crisis prolonged in both depth and duration, testing the nerves of even the most steadfast investors (Financial Times).

Keeping an Eye on Systemic Risks

One of the fallacies of the pre-crisis world was that if individual banks were able to effectively manage their risks, then systemic risk would be under control. However, in reality, if the system isn’t safe, none of the banks are safe, either. There is a need to look at systemic risk (IESE). Industry leaders (Financial Times) admit that the system had clear signs that mortgage underwriting standards were non-existent which eventually led to the collapse of the entire system.

Avoid Excessive Leveraging

The Harvard Business Review recognises that financial markets are prone to instability which emanates from uncertainty about the future. However, when this inherent instability is paired with excessive debts, it can only exacerbate the damage a negative economic shock can cause. The Financial Times too reiterates the importance of reducing debt levels and points out that the system is much safer today due to lower leverage ratio compared to pre-crisis period.

Continue Building Trust

One of the things that were damaged the most during the GFC was trust. Trust among investors, managers and regulators pendulumed wildly from full trust in market forces to trust completely sapping out of the system. Rebuilding trust will dominate the industry’s agenda for the next decade (Financial Times).

Low Interest Rate Environment-Not Necessarily Comforting Times

One of the misconceptions has been that low inflation and relatively efficient markets will be accompanied by financial stability. This thought is misguided and some industry leaders forewarned even before GFC that a period of economic stability also tends to be a time where agents take on excessive risks, which is what happened in 2008 (IESE).

Constant Evaluation

Risk management is a critical tool for analysing information and making investment decisions. However, even then it may fall short of completely insulating the system from financial woes. There is a dire need to avoid complacency and the system needs to constantly evaluate itself. Just as risk management technology for 2007 was not adequate for 2017, and that 2017 technology will be inadequate for 2027, we must constantly challenge ourselves to evaluate every input, every line of code and every piece of data — financial or otherwise (Financial Times).

The lessons learned highlighted above are not exhaustive. The system needs major repair work. As the latest Global Financial Stability Report points that the recovery from the global financial crisis isn’t yet complete and vulnerabilities still exist.

]]>https://shaileshdashdotcom.wordpress.com/2018/03/04/what-have-we-learnt-in-the-last-10-years-post-2007-2008-financial-crisis/feed/0shaileshalmasahCybersecurity Top Priority Spending in Companieshttps://shaileshdashdotcom.wordpress.com/2018/02/20/cybersecurity-top-priority-spending-in-companies-2/
https://shaileshdashdotcom.wordpress.com/2018/02/20/cybersecurity-top-priority-spending-in-companies-2/#respondTue, 20 Feb 2018 11:45:02 +0000http://shaileshdashdotcom.wordpress.com/2018/02/20/cybersecurity-top-priority-spending-in-companies-2/via Cybersecurity Top Priority Spending in Companies
]]>https://shaileshdashdotcom.wordpress.com/2018/02/20/cybersecurity-top-priority-spending-in-companies-2/feed/0shaileshalmasahRegulations faced by wealth managers in GCChttps://shaileshdashdotcom.wordpress.com/2017/11/03/regulations-faced-by-wealth-managers-in-gcc/
https://shaileshdashdotcom.wordpress.com/2017/11/03/regulations-faced-by-wealth-managers-in-gcc/#respondFri, 03 Nov 2017 09:40:55 +0000http://shaileshdashdotcom.wordpress.com/?p=294The GCC governments are actively pursuing creation of a world class ecosystem in the wealth and asset management space. Some of the regulators are at par with international standards of supervision and oversight, propelling the GCC market as one of the most attractive financial hubs in the world. However, there are areas that still require reforms in order for the region to fully enjoy the benefits.

Saudi Arabia’s Capital Markets Authority (CMA) has been streamlining the regulations for licensing, listing and foreign participation in Saudi Arabia. Formed in 2003, it has successively introduced a number of laws and regulatory frameworks to streamline wholesale banking, regulate mutual funds industry, control issuance of capital, rationalize listing regulations and issue licenses to brokerage companies.

In the United Arab Emirates, financial services such as investment management are generally provided from three hubs, namely onshore in the UAE (i.e., outside of a designated free zone); the Dubai International Financial Centre (DIFC); and the Abu Dhabi Global Market (ADGM). All three of these institutions have their own rules and regulations. The DIFC and the ADGM are economic free zones within the UAE and have been established with the aim of attracting foreign investment. Some of the incentives offered to foreign businesses include concessions, a zero per cent tax rate and the ability to own a 100 per cent subsidiary (foreign ownership restrictions apply outside the free zones)(The Law Reviews)

The Dubai Financial Services Authority (DFSA) is the independent regulator of all financial and ancillary services conducted through the DIFC, including investment management. The rules and regulations governing investment management in the DIFC are set out in the Collective Investment Law 2010, the Collective Investment Rules module of the DFSA Rulebook (CIR) and the Regulatory Law (The Law Reviews). The DFSA has given investment firms more flexibility to classify their clients as professional, for example by easing a requirement for the firms to assess clients’ net assets.
In addition, they will be allowed to classify some clients as professional because of the nature of the services being provided to them, without an asset test. It has also created a new class of DIFC-domiciled funds, aimed at the richest and most risk-tolerant investors, which face less stringent regulation than existing funds (Arabian Business)

Similarly, Qatar has established its own regulatory framework under the Qatar Financial Centre (QFC) based on international law and best practices.

In the case of Bahrain, the Central bank of Bahrain has played a key role. It has put in place regulations that recognise the importance of expanding key areas such as the corporate governance, as well as the role and responsibilities of each relevant party of a scheme. It also expands the variety of funds that can be established in Bahrain, by introducing rules governing Real Estate Investment Trusts (REITs) and Private Investment Undertakings (PIUs). Private Investment Undertakings are new breed of investment funds with a high degree of flexibility in structuring, aimed to facilitate private investments, the like of a family held investment, single investor or a single investment type. Due to the investment risk characteristics it may exhibit, such type of scheme can only be initiated to High Net-Worth Individuals and Institutional investors. In keeping with Bahrain’s leadership in Islamic finance, the CIU rules also provide a solid foundation for the establishment and management of mutual funds that comply with Sharia principles.

One of the biggest obstacles in the growth of asset management industry is the regulations relating to foreign ownership. Typically, in the GCC, 51 percent of ownership needs to be held by a national who is paid a sponsorship fee for being a silent partner, while the foreign investor bears the entire risk. However, hybrid models of ownership have emerged for instance the establishment of free zones. Currently, GCC countries are at varying levels of transition to a 100% foreign ownership model. Free zones (in the UAE) allow 100% ownership but there are limits to their mandate. Qatar has opened up some sectors for 100% ownership, though actual approval is at the sole discretion of the Ministry of Business & Trade. Saudi Arabian General Investment Authority (SAGIA) allows 100 percent ownerships if the company is incorporated under SAGIA regime.

]]>https://shaileshdashdotcom.wordpress.com/2017/11/03/regulations-faced-by-wealth-managers-in-gcc/feed/0Wealth-ManagementshaileshalmasahCybersecurity Top Priority Spending in Companieshttps://shaileshdashdotcom.wordpress.com/2017/10/23/cybersecurity-top-priority-spending-in-companies/
https://shaileshdashdotcom.wordpress.com/2017/10/23/cybersecurity-top-priority-spending-in-companies/#respondMon, 23 Oct 2017 06:56:11 +0000http://shaileshdashdotcom.wordpress.com/?p=277Cybersecurity Ventures explains that historically, an entity’s security was mainly rooted in information technology, e.g., servers, networking gear, data centres and IT infrastructures, PCs, laptops, tablets and smartphones. However, the concept of cybersecurity has evolved to include non-computer devices, and non IT centric platforms and environments that covers entire sub-markets i.e. aviation security, automotive security, Internet of Things security and Industrial internet of Things security. Collectively, these sub-markets now make up the entire cybersecurity market.

According to Cybersecurity Ventures, the global cybersecurity market was worth $3.5 billion in 2004. By the end of 2017, it is expected that this market will be worth more than $120 billion; a 34 times increase in the last 13 years.

This has been as a result of an unprecedented rise in cybercrime that has spurred a new wave of spending all over the world and across different entities; making it nearly impossible for analysts to accurately track. Bitdefender survey reports that cybercrime led to estimated financial losses of more than $500 billion in 2015 alone. Moreover, of the 250 IT decision makers surveyed in US companies, 9 out of 10 IT decision makers perceive IT security as a top priority for their companies.

According to SANS survey on IT security spending trends, conducted online in the fourth quarter of 2015, both IT and security budgets for financial services (including banking and insurance), technology providers, government, education and health care are on the rise. Of those who were surveyed, 63 percent pointed towards protection of sensitive data as the main driver behind companies spending on information security. This was followed by 56 percent of respondents highlighting regulatory compliance and 31 percent aiming to reduce incidents and breaches as the main reasons behind companies’ increased spending on information security.